AN ACT Relating to
procurement by state agencies and municipalities of public works that are
unique due to cost, complexity, or public interest; and adding a new chapter to
Title 39 RCW.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF
WASHINGTON:
NEW SECTION. Sec.
1. LEGISLATIVE FINDINGS. The legislature finds
that the traditional process of awarding public works contracts in lump sum to
the lowest responsible bidder is a fair and objective method of selecting a
contractor. However, under certain circumstances, alternative public works
contracting procedures may best serve the public interest if such procedures
are implemented in an open and fair process based on objective and equitable
criteria. The purpose of this chapter is to authorize the use of certain
supplemental alternative public works contracting procedures by state agencies
and large municipalities under limited circumstances, to prescribe appropriate
requirements to ensure that such contracting procedures serve the public
interest, and to establish a process for evaluation of such contracting
procedures.
NEW SECTION. Sec.
2. DEFINITIONS. Unless the
context clearly requires otherwise, the definitions in this section apply
throughout this chapter.
(1) "Alternative
public works contracting procedure" means the design-build and the general
contractor/construction manager contracting procedures authorized in sections 5
and 6 of this act, respectively.
(2) "Public
body" means the state department of general administration; the University
of Washington; Washington State University; every city with a population
greater than one hundred fifty thousand; every county with a population greater
than four hundred fifty thousand; and every port district with a population
greater than five hundred thousand.
(3) "Public works
project" means any work for a public body within the definition of the
term public work in RCW 39.04.010.
NEW SECTION. Sec.
3. PUBLIC NOTIFICATION AND
REVIEW PROCESS. (1) An alternative public works contracting procedure
authorized under this chapter may be used for a specific public works project
only after a public body determines that use of the alternative procedure will
serve the public interest by providing a substantial fiscal benefit, or that
use of the traditional method of awarding contracts in lump sum to the low
responsive bidder is not practical for meeting desired quality standards or
delivery schedules.
(2) Whenever a public
body determines to use one of the alternative public works contracting
procedures authorized under this chapter for a public works project, it shall
first ensure adequate public notification and opportunity for public review and
comment as follows:
(a) The public body
shall conduct a public hearing to receive public comment on its preliminary
determination to use the alternative public works contracting procedure. At
least twenty days before the public hearing, the public body shall cause notice
of such hearing to be published at least once in a legal newspaper of general
circulation published in or as near as possible to that part of the county in
which the public work will be done. The notice shall clearly describe the
proposed project and the preliminary determination to use the alternative
public works contracting procedure. The notice shall also indicate when,
where, and how persons may present their comments on the preliminary
determination, and where persons may obtain additional written information
describing the project.
(b) The public body
shall summarize in a written statement its reasons for using the alternative
public works contracting procedure. This statement, along with other relevant
information describing the project, shall be made available upon request to
interested parties at least twenty days before the public hearing.
(c) The public body
shall receive and record both written and oral comments concerning the
preliminary determination at the public hearing.
(3) Final
determinations to use an alternative public works contracting procedure may be
made only by the legislative or governing authority of the public body, or, in
the case of state agencies, by the agency director or chief administrative
officer. Final determinations shall be accompanied by a concise statement of
the principal reasons for overruling any considerations urged against the
determination. Final determinations are subject to appeal to superior court
within thirty days of the determination, provided that notice of such appeal
shall be provided to the public body within seven days of the determination.
The court may award reasonable attorneys' fees to the prevailing party.
(4) Following
completion of a public works project using one of the alternative public works
contracting procedures under this chapter, a report shall be submitted to the
legislative or governing authority of the public body reviewing the utilization
and performance of the alternative public works contracting procedure. Such
report shall be made available to the public.
NEW SECTION. Sec.
4. SPECIAL COUNTY
DEVELOPMENT AUTHORITY. An alternative public works contracting procedure
authorized in this chapter may be used by a special agency, authority, or other
district established by a county for construction of a baseball stadium
provided that:
(1) The county is
authorized to use the alternative public works contracting procedure under this
chapter;
(2) The special agency,
authority, or district complies with all the requirements of this chapter
related to the alternative public works contracting procedure utilized; and
(3) The county itself
complies with section 3 of this act with respect to the baseball stadium
project to be undertaken by the special agency, authority, or district.
NEW SECTION. Sec.
5. DESIGN-BUILD. (1)
Notwithstanding any other provision of law, and after complying with section 3
of this act, the following public bodies may utilize the design-build procedure
of public works contracting for public works projects authorized under this
section: The state department of general administration; the University of
Washington; Washington State University; every city with a population greater
than one hundred fifty thousand; and every county with a population greater
than four hundred fifty thousand. For the purposes of this section,
"design-build procedure" means a contract between a public body and
another party in which the party agrees to both design and build the structure,
facility, or other item specified in the contract.
(2) Public bodies
authorized under this section may utilize the design-build procedure for public
works projects valued over ten million dollars where:
(a) The construction
activities are highly specialized and a design-build approach is critical in
developing the construction methodology;
(b) The project design
is repetitive in nature and is an incidental part of the installation or
construction; or
(c) The program
elements of the project design are simple and do not involve complex functional
interrelationships.
(3) The state
department of general administration may use the design-build procedure
authorized in subsection (2)(c) of this section for one project.
(4) Contracts for
design-build services shall be awarded through a competitive process utilizing
public solicitation of proposals for design-build services. The public body
shall publish at least once in a legal newspaper of general circulation
published in or as near as possible to that part of the county in which the
public work will be done, a notice of its request for proposals for design-build
services and the availability and location of the request for proposal
documents. The request for proposal documents shall include:
(a) A detailed
description of the project including programmatic, performance, and technical
requirements and specifications, functional and operational elements, and
minimum and maximum net and gross areas of any building;
(b) The reasons for
using the design-build procedure;
(c) A description of
the qualifications, if any, to be required of the proposer;
(d) A description of
the process the public body will use to evaluate qualifications and proposals,
including evaluation factors and the relative weight of factors. Evaluation
factors shall include, but not be limited to: Proposal price; ability of
professional personnel; past performance on similar projects; ability to meet
time and budget requirements; ability to provide a performance and payment bond
for the project; recent, current, and projected work loads of the firm; and the
concept of the proposal;
(e) The form of the
contract to be awarded;
(f) The maximum
allowable construction cost and minority and women enterprise total project
goals;
(g) The amount to be
paid to finalists submitting best and final proposals who are not awarded a
design-build contract; and
(h) Other information
relevant to the project.
(5) The public body
shall establish a committee to evaluate the proposals based on the factors,
weighting, and process identified in the request for proposals. Based on its
evaluation, the public body shall select not fewer than three nor more than
five finalists to submit best and final proposals. Best and final proposals
shall be evaluated and scored based on the factors, weighting, and process
identified in the initial request for proposals. Final proposals may not be
considered if the proposal cost is greater than the maximum allowable
construction cost identified in the initial request for proposals.
(6) The public body
shall initiate negotiations with the firm submitting the highest scored final proposal.
If the public body is unable to execute a contract with that firm, negotiations
with that firm may be suspended or terminated and the public body may proceed
to negotiate with the next highest scored firm. Public bodies shall continue
in accordance with this procedure until a contract agreement is reached or the
selection process is terminated. The public body may, in its sole discretion,
reject all proposals. The finalist awarded the contract shall provide a
performance and payment bond for the contracted amount. The public body shall
provide appropriate honorarium payments to finalists submitting best and final
proposals who are not awarded a design-build contract. Honorarium payments
shall be sufficient to generate meaningful competition among potential
proposers on design-build projects.
NEW SECTION. Sec.
6. GENERAL
CONTRACTOR/CONSTRUCTION MANAGER. (1) Notwithstanding any other provision of
law, and after complying with section 3 of this act, the following public
bodies may utilize the general contractor/construction manager procedure of
public works contracting for public works projects authorized under subsection
(2) of this section: The state department of general administration; the
University of Washington; Washington State University; every city with a
population greater than one hundred fifty thousand; every county with a
population greater than four hundred fifty thousand; and every port district
with a population greater than five hundred thousand. For the purposes of this
section, "general contractor/construction manager" means a firm with
which a public body has selected and negotiated a maximum allowable
construction cost to be guaranteed by the firm, after competitive selection
through formal advertisement and competitive bids, to provide services during
the design phase that may include life-cycle cost design considerations, value
engineering, scheduling, cost estimating, constructability, alternative
construction options for cost savings, and sequencing of work, and to act as
the construction manager and general contractor during the construction phase.
(2) Public bodies
authorized under this section may utilize the general contractor/construction
manager procedure for public works projects valued over ten million dollars
where:
(a) Implementation of
the project involves complex scheduling requirements;
(b) The project
involves construction at an existing facility which must continue to operate
during construction; or
(c) The involvement of
the general contractor/construction manager during the design stage is critical
to the success of the project.
(3) Contracts for the
services of a general contractor/construction manager under this section shall
be awarded through a competitive process requiring the public solicitation of
proposals for general contractor/construction manager services. Minority and
women business enterprise total project goals shall be specified in the public
solicitation of proposals and the bid instructions to the general
contractor/construction manager finalists. A public body is authorized to
include an incentive clause in any contract awarded under this section for
savings of either time or cost or both from that originally negotiated. No incentives
granted shall exceed five percent of the maximum allowable construction cost.
A public body shall establish a committee to evaluate the proposals considering
such factors as: Ability of professional personnel; past performance in
negotiated and complex projects; ability to meet time and budget requirements;
location; recent, current, and projected work loads of the firm; and the
concept of their proposal. After the committee has selected the most qualified
finalists, these finalists shall submit sealed bids for the percent fee, which
is the percentage amount to be earned by the general contractor/construction
manager as overhead and profit, on the estimated maximum allowable construction
cost and the fixed amount for the detailed specified general conditions work.
The maximum allowable construction cost may be negotiated between the public
body and the selected firm after the scope of the project is adequately
determined to establish a guaranteed contract cost for which the general
contractor/construction manager will provide a performance and payment bond.
The guaranteed contract cost includes the fixed amount for the detailed
specified general conditions work, the negotiated maximum allowable
construction cost, the percent fee on the negotiated maximum allowable
construction cost, and sales tax. If the public body is unable to negotiate a
satisfactory maximum allowable construction cost with the firm selected that
the public body determines to be fair, reasonable, and within the available
funds, negotiations with that firm shall be formally terminated and the public
body shall negotiate with the next low bidder and continue until an agreement
is reached or the process is terminated. If the maximum allowable construction
cost varies more than fifteen percent from the bid estimated maximum allowable
construction cost due to requested and approved changes in the scope by the
public body, the percent fee shall be renegotiated. All subcontract work shall
be competitively bid with public bid openings. Specific contract requirements
for women and minority enterprise participation shall be specified in each
subcontract bid package that exceeds ten percent of the public body's estimated
project cost. All subcontractors who bid work over two hundred thousand
dollars shall post a bid bond and all subcontractors who are awarded a contract
over two hundred thousand dollars shall provide a performance and payment bond
for their contract amount. All other subcontractors shall provide a
performance and payment bond if required by the general contractor/construction
manager. Bidding on subcontract work by the general contractor/construction
manager or its subsidiaries is prohibited. The general contractor/construction
manager may negotiate with the low-responsive bidder in accordance with section
8 of this act or, if unsuccessful in such negotiations, rebid.
(4) If the project is
completed for less than the agreed upon maximum allowable construction cost,
any savings not otherwise negotiated as part of an incentive clause shall
accrue to the public body. If the project is completed for more than the
agreed upon maximum allowable construction cost, excepting increases due to any
contract change orders approved by the public body, the additional cost shall
be the responsibility of the general contractor/construction manager.
NEW SECTION. Sec.
7. PROJECT MANAGEMENT AND
CONTRACTING REQUIREMENTS. (1) A public body utilizing the alternative public
works contracting procedures authorized under sections 5 and 6 of this act
shall provide for:
(a) The preparation of
appropriate, complete, and coordinated design documents consistent with the
procedure utilized;
(b) To the extent
appropriate, an independent review of the contract documents through value
engineering or constructability studies prior to bid or proposal solicitation;
(c) Reasonable budget
contingencies totaling not less than five percent of the anticipated contract
value;
(d) To the extent
appropriate, on-site architectural or engineering representatives during major
construction or installation phases;
(e) Employment of staff
or consultants with expertise and prior experience in the management of
comparable projects; and
(f) Contract documents
that include alternative dispute resolution procedures to be attempted prior to
the initiation of litigation.
(2) A public body
utilizing the alternative public works contracting procedures under sections 5
and 6 of this act may provide incentive payments to contractors for early completion,
cost savings, or other goals if such payments are identified in the request for
proposals.
NEW SECTION. Sec.
8. NEGOTIATION WITH LOWEST
RESPONSIBLE BIDDER OR PROPOSER. Notwithstanding the provisions of
RCW 39.04.015, a public body is authorized to negotiate an adjustment to
the lowest bid or proposal price for a public works project awarded under
sections 5 and 6 of this act based upon agreed changes to the contract plans
and specifications under the following conditions:
(1) All responsive bids
or proposal prices exceed the available funds, as certified by an appropriate
fiscal officer;
(2) The apparent
low-responsive bid or proposal does not exceed the available funds by the
greater of one hundred twenty-five thousand dollars or two percent for projects
valued over ten million dollars; and
(3) The negotiated
adjustment will bring the bid or proposal price within the amount of available
funds.
NEW SECTION. Sec.
9. IMPLEMENTATION. This chapter
shall not be construed to affect or modify the existing statutory, regulatory,
or charter powers of public bodies except to the extent that a procedure
authorized by this chapter is adopted by a public body for a particular public
works project. In that event, the normal contracting or procurement limits or
requirements of a public body as imposed by statute, ordinance, resolution, or
regulation shall be deemed waived or amended only to the extent necessary to
accommodate such procedures for a particular public works project.
NEW SECTION. Sec.
10. PUBLIC INSPECTION OF
CERTAIN RECORDS. (1) Except as provided in subsection (2) of this section, all
proceedings, records, contracts, and other public records relating to alternative
public works transactions under this chapter shall be open to the inspection of
any interested person, firm, or corporation in accordance with chapter 42.17
RCW.
(2) Trade secrets, as
defined in RCW 19.108.010, or other proprietary information submitted by a
bidder, offeror, or contractor in connection with an alternative public works
transaction under this chapter shall not be subject to chapter 42.17 RCW if the
bidder, offeror, or contractor specifically states in writing the reasons why
protection is necessary, and identifies the data or materials to be protected.
NEW SECTION. Sec.
11. INDEPENDENT REVIEW AND
STUDY. (1) There is established a temporary independent oversight committee to
review the utilization of the alternative public works contracting procedures
authorized under this chapter and to evaluate potential future utilization of
other alternative contracting procedures, including, but not limited to,
contractor prequalification. The membership of the committee shall include:
Two members of the house of representatives, one from each major caucus,
appointed by the speaker of the house of representatives; two members of the
senate, one from each major caucus, appointed by the president of the senate;
representatives from the appropriate segments of the construction and design
industries, appointed by the governor; representatives from appropriate labor
organizations, appointed by the governor; representatives from public bodies
authorized to use the alternative public works contracting procedures under
this chapter, appointed by the governor; and a representative from the office
of financial management, appointed by the governor. The governor shall
consider the recommendations of the established organizations representing the
construction and design industries and organized labor in making the industry
and labor appointments to the committee.
(2) The committee shall
meet quarterly beginning after July 1, 1994. At the first meeting of the
committee, a chair or cochairs shall be selected from among the committee's
membership. Staff support for the committee shall be provided by the agencies
and organizations represented on the committee.
(3) Public bodies
utilizing the alternative contracting procedures authorized under this chapter
shall provide any requested information concerning implementation of projects
under this chapter to the committee in a timely manner, excepting any trade secrets
or proprietary information.
(4) The committee shall
report to the appropriate standing committees of the legislature by December
10, 1996, concerning its findings and recommendations.
NEW SECTION. Sec.
12. APPLICATION. The
alternative public works contracting procedures authorized under this chapter
are limited to public works contracts signed before July 1, 1997. Methods of
public works contracting authorized by sections 5 and 6 of this act shall
remain in full force and effect until completion of contracts signed before
July 1, 1997.
NEW SECTION. Sec.
13. CAPTIONS. Captions as
used in this act do not constitute any part of law.
NEW SECTION. Sec.
14. If any provision of this
act or its application to any person or circumstance is held invalid, the
remainder of the act or the application of the provision to other persons or
circumstances is not affected.
NEW SECTION. Sec.
15. The following acts or
parts of acts, as now existing or hereafter amended, are each repealed,
effective July 1, 1997:
(1) RCW 39.--.--- and 1994 c
. . . s 1 (section 1 of this act);
(2) RCW 39.--.--- and 1994 c
. . . s 2 (section 2 of this act);
(3) RCW 39.--.--- and 1994 c
. . . s 3 (section 3 of this act);
(4) RCW 39.--.--- and 1994 c
. . . s 4 (section 4 of this act);
(5) RCW 39.--.--- and 1994 c
. . . s 5 (section 5 of this act);
(6) RCW 39.--.--- and 1994 c
. . . s 6 (section 6 of this act);
(7) RCW 39.--.--- and 1994 c
. . . s 7 (section 7 of this act);
(8) RCW 39.--.--- and 1994 c
. . . s 8 (section 8 of this act);
(9) RCW 39.--.--- and 1994 c
. . . s 9 (section 9 of this act);
(10) RCW 39.--.--- and 1994 c
. . . s 10 (section 10 of this act);
(11) RCW 39.--.--- and 1994 c
. . . s 11 (section 11 of this act);
(12) RCW 39.--.--- and 1994 c
. . . s 12 (section 12 of this act);
(13) RCW 39.--.--- and 1994 c
. . . s 13 (section 13 of this act);
(14) RCW 39.--.--- and 1994 c
. . . s 14 (section 14 of this act); and
(15) RCW 39.--.--- and 1994 c
. . . s 15 (section 15 of this act).
NEW
SECTION. Sec. 16. CODIFICATION. Sections 1
through 15 of this act shall constitute a new chapter in Title 39 RCW.
